Assessing the Relationship between Population Growth
and Economic Growth
Karen Chang Chih Hua Chen
Jessica Chen Derek Shum
Gabriela Alcaraz Dennis Yue
Overview
Problem: High population growth in developing countries
Solution: Economic growth Expanded labor force that utilizes the
productive capacity of women Reduces the need for large families to perform
the tasks of subsistence
Our Research
Developing countries: higher marginal productivity Average annual growth rate during 1965-99:
4.1% in low-income countries 4.2% in middle-income countries 3.2% in high-income countries
Trend: low-income countries will one day exceed the GDP of today’s high-income countries
However, population growth in developing countries > developed countries
Large increase in GDP in developing countries GDP growth is offset by faster population growth
Negative correlation: economic and population growth rates
Opposing Views
As income increases, both the birth and death rates decrease.
Since these forces are offsetting, the rate of population growth is independent of the rate of economic growth.
Variables in the Analysis Fertility : Birth rate
Economic Growth : GDP per Capita Growth
Regional Dummy Variables - to control for cultural differences across regions, religion dummy variables were incorporated in order to account for regional/cultural and religious differences which may influence birth rates.
Secondary school enrolment of females: incorporated based on the findings that higher female education levels contribute to lower birth rates
Variable Included in the Analysis
Variable MeasurementNumerical :Birth rate, crude (BIRTHRATE) per 1,000 peopleGDP per capita growth (GDPCAPITA) annual %Secondary school enrolment of females (SECONDENROL) % netRegional dummy variables:Europe and North America 0 = No, 1 = YesLatin America and the Caribbean 0 = No, 1 = YesEast Asia and the Pacific 0 = No, 1 = YesSub-Saharan Africa 0 = No, 1 = YesSouth Asia 0 = No, 1 = YesMiddle East and North Africa 0 = No, 1 = YesReligion dummy variables:Catholic 0 = No, 1 = YesMuslim 0 = No, 1 = YesOther 0 = No, 1 = Yes
Descriptive Statistics for Numerical Variables
GDPCAPITA BIRTHRATE SECONDENROL Mean 3.96586 13.18532 83.34208 Median 3.900848 12.8 85.07929 Maximum 11.47188 24.5 100 Minimum -2.01501 7.8 52.0957 Std. Dev. 2.821509 4.132517 10.06354 Skewness 0.20167 0.913336 -0.884038 Kurtosis 3.206517 3.104123 3.672264
Jarque-Bera 0.402111 6.555655 7.006982 Probability 0.817867 0.03771 0.030092
Observations 47 47 47
Histogram of GDP per Capita Growth
Histogram of GDP per capita
0
5
10
15
20
25
-2.01501 0.232805 2.48062 4.728435 6.97625 9.224065 and bigger
Class
Fre
qu
ency
Histogram of Birth Rate (per 1000 people)
Histogram of Birth rate
02468
10121416
7.8
10.5
8333
333
13.3
6666
667
16.1
5
18.9
3333
333
21.7
1666
667
and
bigg
er
Class
Fre
qu
ency
Histogram of Secondary School Enrolment of Females
Histogram of Secondary enrollment
0
5
10
15
20
52.0957 60.07975 68.0638 76.04785 84.0319 92.01595 andbigger
Class
Fre
qu
ency
Regional Distribution of the Data
Number of countries analyzed by region (total = 47)
EUROPE and North America; 30
LATIN AMERICA AND
CARRIBBEAN; 9
EAST ASIA AND PACIFIC; 4
SUB-SAHARAN AFRICA; 2 Middle East and
North Africa; 1
South Asia; 1
Distribution of Countries by Religion
Number of countries by religion
CATHOLIC; 24
MUSLIM; 4
OTHER; 19
Scatter Diagrams of the Numerical Variables
Correlation Results
SECONDENROL BIRTHRATE GDPCAPITA SECONDENROL 1.000000 -0.502772 0.185021
BIRTHRATE -0.502772 1.000000 -0.381509 GDPCAPITA 0.185021 -0.381509 1.000000
Results of First Regression
Variable Coefficient Std. Error t-Statistic Prob. GDP -0.512892 0.203729 -2.517516 0.0143
C 15.51195 0.979876 15.83053 0R-squared 0.090106 13.46076Adjusted 0.075889 4.600245S.E. of 4.422247 5.841007Sum 1251.601 5.90736Log -190.7532 6.337889Durbin- 2.128674 0.014333
Schwarz criterion F-statistic Prob(F-statistic)
Included observations: 66
Mean dependent S.D. dependent var Akaike info
Dependent Variable: BIRTHRATEMethod: Least SquaresDate: 11/21/05 Time: 15:22Sample: 1 66
Heteroskedasticity
F-statistic 0.078416 0.92467Obs*R- 0.163892 0.921322
Variable Coefficient Std. Error t-Statistic Prob. C 16.306 7.656015 2.129829 0.0371
GDP 1.052923 3.199943 0.329044 0.7432GDP^2 -0.067145 0.32898 -0.204101 0.8389
R-squared 0.002483 18.96365Adjusted -0.029184 29.11559S.E. of 29.53738 9.65358Sum 54964.8 9.753109Log -315.5681 0.078416Durbin- 2.231902 0.92467
F-statistic Prob(F-statistic)
Mean dependent S.D. dependent var Akaike info Schwarz criterion
Method: Least SquaresDate: 11/21/05 Time: 15:26Sample: 1 66Included observations: 66
Probability Probability
Test Equation:Dependent Variable: RESID^2
White Heteroskedasticity Test:
Residuals vs. GDP per capita growth
Residuals vs. GDP
-5
-4
-3
-2
-1
0
1
2
3
4
5
-4 -2 0 2 4 6 8 10 12 14
GDP
Res
idu
als
Residuals vs. Secondary school enrolment of females
Residual vs. Education
-5
-4
-3
-2
-1
0
1
2
3
4
5
0 20 40 60 80 100 120
Secondary enrolment
Res
idu
als
Full Model Results
Variable Coefficient Std. Error t-Statistic Prob. CATHOLI -0.194416 0.780486 -0.249097 0.8047EDUCATI -0.032557 0.047279 -0.688602 0.4954EUROPE 0.182913 1.338587 0.136647 0.8921
GDP -0.262318 0.155818 -1.683493 0.1007LACARRI 5.891339 1.669575 3.528647 0.0011
ME 2.666171 3.360246 0.793445 0.4326MUSLIM 2.668915 1.91481 1.393827 0.1717SOUTHA 10.83694 3.283608 3.300315 0.0021SUBSAH 6.526576 2.111468 3.091014 0.0038
C 15.00119 4.155374 3.610071 0.0009R- 0.723493 13.18532Adjusted 0.656235 4.132517S.E. of 2.422957 4.794156Sum 217.2166 5.187805Log -102.6627 10.75691Durbin- 2.046554 0 Prob(F-statistic)
S.D. dependent var Akaike info Schwarz criterion F-statistic
Date: 11/23/05 Time: 12:01Sample(adjusted): 1 47Included observations: 47 after adjusting endpoints
Mean dependent
Dependent Variable: BIRTHRATEMethod: Least Squares
Regression model results excluding Europe and N.A., Education and Catholic
Variable Coefficient Std. Error t-Statistic Prob. GDP -0.251899 0.149184 -1.688515 0.0991
LACARRI 6.212096 1.015191 6.119143 0ME 3.007871 2.956901 1.017238 0.3152
MUSLIM 2.790613 1.793011 1.556383 0.1275SOUTHA 11.09942 2.890837 3.839517 0.0004
SUBSAHA 6.474434 1.720612 3.762868 0.0005C 12.1816 0.786785 15.48275 0
R-squared 0.718737 13.18532Adjusted 0.676548 4.132517S.E. of 2.350281 4.683551Sum 220.9528 4.959105Log -103.0634 17.03595Durbin- 1.977668 0
Schwarz criterion F-statistic Prob(F-statistic)
Included observations: 47 after adjusting endpoints
Mean dependent S.D. dependent var Akaike info
Dependent Variable: BIRTHRATEMethod: Least SquaresDate: 11/30/05 Time: 16:41Sample(adjusted): 1 47
White Heteroskedasticity test for full model
F-statistic 1.199988 0.322891Obs*R- 12.87128 0.301822
Variable Coefficient Std. Error t-Statistic Prob. C -16.54627 33.00627 -0.501307 0.6193
CATHOLI -1.884167 1.490539 -1.264084 0.2146EDUCATI 0.633015 0.837605 0.755744 0.4549EDUCATI -0.004398 0.005305 -0.829002 0.4127EUROPE -2.054369 2.524099 -0.813902 0.4212
GDP 0.673743 0.698411 0.964681 0.3413GDP^2 -0.046284 0.072137 -0.641616 0.5253
LACARRI 2.641373 3.141559 0.840784 0.4062ME -9.328664 6.721449 -1.387895 0.1739
MUSLIM 1.309848 3.86265 0.339106 0.7366SOUTHA -9.940727 6.51599 -1.52559 0.1361SUBSAH -2.886612 4.054695 -0.711918 0.4812R- 0.273857 4.62163Adjusted 0.045641 4.636241S.E. of 4.529205 6.074808Sum 717.9793 6.547187Log -130.758 1.199988Durbin- 1.943674 0.322891
Schwarz criterion F-statistic Prob(F-statistic)
Included observations: 47
Mean dependent S.D. dependent var Akaike info
Dependent Variable: RESID^2Method: Least SquaresDate: 11/23/05 Time: 12:05Sample: 1 47
White Heteroskedasticity Test: Probability Probability
Test Equation:
Regression birthrate vs. regional dummies
Variable Coefficient Std. Error t-Statistic Prob. EUROPE -0.039667 1.29711 -0.030581 0.9758LACARRI 6.9 1.464362 4.71195 0
ME 5.9 2.724476 2.165554 0.0362SOUTHA 13.3 2.724476 4.881672 0
SUBSAHA 6.6 2.11037 3.127413 0.0032C 11.2 1.218423 9.192211 0
R-squared 0.690078 13.18532Adjusted 0.652282 4.132517S.E. of 2.436846 4.73803Sum 243.4669 4.974219Log -105.3437 18.25824Durbin- 2.002811 0
F-statistic Prob(F-statistic)
Mean dependent S.D. dependent var Akaike info Schwarz criterion
Method: Least SquaresDate: 11/30/05 Time: 18:43Sample(adjusted): 1 47Included observations: 47 after adjusting endpoints
Dependent Variable: BIRTHRATE
Regression birthrate vs. regional dummies, GDP and education
Variable Coefficient Std. Error t-Statistic Prob. EDUCATI -0.035453 0.046463 -0.76304 0.45EUROPE 0.283048 1.327011 0.213298 0.8322
GDP -0.198786 0.149191 -1.332429 0.1905LACARRI 5.972144 1.606181 3.718225 0.0006
ME 5.394289 2.768537 1.948426 0.0586SOUTHA 13.39514 2.764075 4.846157 0
SUBSAHA 6.531946 2.111913 3.092905 0.0037C 14.92642 4.11658 3.625927 0.0008
R-squared 0.706116 13.18532Adjusted 0.653367 4.132517S.E. of 2.433041 4.77Sum 230.8678 5.084919Log -104.095 13.38648Durbin- 2.126694 0 Prob(F-statistic)
S.D. dependent var Akaike info Schwarz criterion F-statistic
Date: 11/30/05 Time: 16:43Sample(adjusted): 1 47Included observations: 47 after adjusting endpoints
Mean dependent
Dependent Variable: BIRTHRATEMethod: Least Squares
Final Regression Model
Variable Coefficient Std. Error t-Statistic Prob. CATHOLI 0.611282 0.998419 0.61225 0.5437
GDP -0.584917 0.180259 -3.244878 0.0023EDUCATI -0.161258 0.049413 -3.263474 0.0022MUSLIM 5.190597 1.862584 2.786771 0.008
C 28.19069 4.03927 6.979154 0R- 0.442458 13.18532Adjusted 0.389359 4.132517S.E. of 3.229295 5.282693Sum 437.9905 5.479517Log -119.1433 8.332662Durbin- 2.221721 0.000048
Akaike info Schwarz criterion F-statistic Prob(F-statistic)
Sample(adjusted): 1 47Included observations: 47 after adjusting endpoints
Mean dependent S.D. dependent var
Dependent Variable: BIRTHRATEMethod: Least SquaresDate: 11/23/05 Time: 12:12
Regression model considering interaction between the variables
Variable Coefficient Std. Error t-Statistic Prob. CATHOLI 2.272919 1.702012 1.335431 0.1889MUSLIM 4.58625 4.762702 0.962951 0.3411
GDP*CAT -0.553896 0.312338 -1.773389 0.0834GDP*MUS -0.069502 0.654762 -0.106149 0.916
C 12.73684 0.919679 13.84923 0R-squared 0.140812 13.18532Adjusted 0.058985 4.132517S.E. of 4.008786 5.715142Sum 674.9554 5.911966Log -129.3058 1.720847Durbin- 1.867785 0.163388
Akaike info Schwarz criterion F-statistic Prob(F-statistic)
Sample(adjusted): 1 47Included observations: 47 after adjusting endpoints
Mean dependent S.D. dependent var
Dependent Variable: BIRTHRATEMethod: Least SquaresDate: 11/30/05 Time: 16:46
Conclusion
Negative relationship between economic growth and population birth rates
Female education levels a negative relationship with population birth rates
Religions that discourage the use of birth control such as Catholicism and Muslim religions have a significant positive effect on birth rates
The End
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